Sea Dragon formalizes Second Amended Agreement for the acquisition of NPC Egypt

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, May 11, 2012 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon") (TSX VENTURE: SDX) announces that further to its press release of April 30, 2012, Sea Dragon has entered into a Second Amended and Restated Share Purchase Agreement (the "Second Amended Agreement") with Golden Crescent Investments Ltd. ("Golden Crescent") whereby Sea Dragon will acquire, directly or indirectly, all of the issued and outstanding shares of National Petroleum Company Egypt Limited ("NPC Egypt") (the "Acquisition").

Revised Terms of the Acquisition

Under the terms of the Second Amended Agreement, Sea Dragon will have until August 8, 2012 to complete the Acquisition (subject to a 10 day extension).  Golden Crescent will be entitled until August 1, 2012, to solicit and entertain alternative proposals. In the event that Golden Crescent receives a proposal it wishes to accept prior to August 1, 2012, it may terminate the Second Amended Agreement without any: (a) penalty or payment in favour of Sea Dragon of the previously contemplated termination fee; or (b) right of Sea Dragon to match any alternative proposal.

In addition, prior to August 1, 2012, Golden Crescent may, at its option without terminating the Second Amended Agreement and in consultation with Sea Dragon, seek a farm-in partner for the North El Maghara concession (to a maximum participating interest of 50% of such concession), as well as a buyer for its 12.75% participating interest in the South Ramadan concession. Should any such transaction be completed, any cash consideration received therefor will be used to fund the development of the North El Maghara concession, certain work undertaken by National Petroleum Company South Abu Zeneima Ltd. ("NPC SAZ") and/or South Abu Zenima Petroleum Company ("Petrozenima"), as applicable, or cash call obligations issued by the Offshore Shukheir Oil Company (the joint operating company for the Shukheir Marine concession) and/or the South Ramadan concession management committee or will remain, directly or indirectly, with NPC Egypt and will not be included as part of the working capital adjustment between Sea Dragon and Golden Crescent at closing.

In addition, under the terms of the Second Amended Agreement, the parties have agreed that Sea Dragon shall oversee ongoing detailed engineering work on the Muzhil Field prior to closing and for the amount of US$2.5 million deposited by Sea Dragon in escrow upon the execution of the original share purchase agreement between Sea Dragon and Golden Crescent dated January 6, 2012 (the "Escrow Amount") to be released from time to time to satisfy third party costs that may be incurred by NPC SAZ and/or Petrozenima with respect to the development of the Muzhil Field. In addition, Sea Dragon has released US$500,000 (the "Release Amount") of the Escrow Amount to Golden Crescent concurrently with the execution of the Second Amended Agreement on account of additional legal fees incurred by Golden Crescent in amending the terms of the Acquisition. In the event that the Acquisition does not proceed and non-completion fee becomes payable to Golden Crescent under the terms of the Second Amended Agreement, only the balance of the Escrow Amount (after payment of: (i) all third party obligations incurred by NPC SAZ and/or Petrozenima with respect to the development of the Muzhil Field as aforesaid; and (ii) the Release Amount) will be paid to Golden Crescent. Due to the utilization of the Escrow Amount to pay for ongoing work by NPC SAZ and/or Petrozenima on Muzhil Field, the extension of the closing date of the Acquisition is not expected to have a detrimental effect on the anticipated date of Muzil Field first oil.

Other than the foregoing amendments, the material terms and conditions of the Amended and Restated Share Purchase Agreement dated March 19, 2012, including the completion prior to closing of the proposed International Finance Corporation financing announced by the Corporation on January 31, 2012, the receipt of the necessary consents and approvals from Sea Dragon's senior secured creditors and the completion of certain amendments to Sea Dragon's senior secured reserve-based credit facility agreement and related agreements and the receipt of all necessary regulatory and stock exchange approvals, remain unchanged.

About Sea Dragon Energy Inc.

Sea Dragon is an international exploration and development company with a focus on the Middle East and an office in Cairo Egypt.  For further information please see the website of Sea Dragon at www.seadragonenergy.com and/or Sea Dragon's filed documents at www.sedar.com.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

Special Note Regarding Forward-Looking Information

This press release contains certain statements or disclosures relating to Sea Dragon that are based on the expectations of Sea Dragon as well as assumptions made by and information currently available to Sea Dragon which may constitute forward-looking information under applicable securities laws.  All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Sea Dragon anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information.  In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology. In particular, this press release contains forward-looking statements in respect of the Acquisition.

Readers are cautioned that there is no assurance that the transactions referenced herein will proceed and certain conditions must be met before the Acquisition can be completed. Such conditions include the receipt of all necessary approvals. There is no assurance that the required approvals will be received and there is therefore no assurance that the Acquisition will be completed in the time frame anticipated or at all. With respect to the forward-looking statements contained herein, the Corporation has made assumptions regarding timely receipt of the necessary approvals and satisfaction of the other closing conditions for the Acquisition and general economic conditions. Many factors could cause the performance or achievement by Sea Dragon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include the failure to obtain the required approvals and changes to economic conditions. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Sea Dragon is not under any duty to update any of the forward-looking statements after the date of this press release or to conform such statements to actual results or to changes Sea Dragon's expectations and Sea Dragon disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Said Arrata 
Chairman, CEO and Director 
[phone] 

Tony Anton
President, COO and Director
[phone]

Olivier Serra 
Chief Financial Officer and Director 
[phone] 

Brisco Capital Partners Corp.
Investor Relations
[phone]